Apple Core
It was only about seven months ago that a single share of Apple stock was trading at over $705. On paper, at least, the market capitalization of this computer / smartphone / tablet / music player company was greater than that of Exxon/Mobil. It was the wealthiest company in the world.
Since then, Apple share prices have toppled forty percent, at one point hitting a low of $385. We haven't heard from them in many years, but suddenly the Apple Death Knell clock is running again. There hasn't been a new product out of Apple in seven months. Tim Cook is no Steve Jobs, and the board is secretly looking to replace him. Apple is doomed. Dooooomed! Wailly, wailly, wailly!
Except that everything is fine. Move along, there's nothing to see here.
Apple just ended its quarter with revenues of 43.6 billion dollars and a net quarterly profit of 9.5 billion. They sold 37.4 million iPhones, compared to 35.1 million in this quarter a year ago. More importantly, customer loyalty to iPhone is 95 percent. The vast majority of iPhone owners plan to upgrade to another iPhone.
Apple sold 19.5 million iPads versus 11.8 million a year ago. The same customer loyalty and satisfaction as with the iPhone.
Mac sales dropped by two percent, but that's a lot better than anyone else is doing in this post-PC world.
So they're still minting money and selling more than ever. But that's not the real news. There are iTunes music stores in 119 countries. Movies are sold in 109 countries. There are App stores in 155 countries, covering 90 percent of the world's population. 800 apps are downloaded every second. Apple's App universe is not only huge, but vastly superior to the competition. 97 percent of all mobile malware comes from Android software.
It is this infrastructure that attracts and holds Apple customers. I play with Android, but unless Apple really screws up, I have no reason to get my music and apps from anywhere else. Any Apple device I buy automatically becomes part of a larger whole, and they all synchronize with each other seamlessly.
So why did Apple's stock price plunge? Frankly, because it couldn't go any higher or be more popular. When 90 percent of your shares are owned by institutional investors, there's no one left to sell them to. It's the Law of Big Numbers. Since the introduction of the iPod until last October, shares of Apple have increased by about 9,300 percent. That kind of growth is simply unsustainable.
But that does not imply that Apple can or should come out with brand-new products every six months. If past history is any indication, there will be new laptops in the summer, and new phones and iPads in the fall. And there may be something else. but Apple isn't saying. Tim Cook isn't Steve Jobs because even Steve Jobs wasn't Steve Jobs. It's easy to deify the dead, because they make so few mistakes, but Jobs made plenty. Costly ones, too. Tim Cook is a supply-chain genius and a gifted manager.
So what is Apple doing with all that money they're making? They think their best investment is to buy back Apple stock.
Since then, Apple share prices have toppled forty percent, at one point hitting a low of $385. We haven't heard from them in many years, but suddenly the Apple Death Knell clock is running again. There hasn't been a new product out of Apple in seven months. Tim Cook is no Steve Jobs, and the board is secretly looking to replace him. Apple is doomed. Dooooomed! Wailly, wailly, wailly!
Except that everything is fine. Move along, there's nothing to see here.
Apple just ended its quarter with revenues of 43.6 billion dollars and a net quarterly profit of 9.5 billion. They sold 37.4 million iPhones, compared to 35.1 million in this quarter a year ago. More importantly, customer loyalty to iPhone is 95 percent. The vast majority of iPhone owners plan to upgrade to another iPhone.
Apple sold 19.5 million iPads versus 11.8 million a year ago. The same customer loyalty and satisfaction as with the iPhone.
Mac sales dropped by two percent, but that's a lot better than anyone else is doing in this post-PC world.
So they're still minting money and selling more than ever. But that's not the real news. There are iTunes music stores in 119 countries. Movies are sold in 109 countries. There are App stores in 155 countries, covering 90 percent of the world's population. 800 apps are downloaded every second. Apple's App universe is not only huge, but vastly superior to the competition. 97 percent of all mobile malware comes from Android software.
It is this infrastructure that attracts and holds Apple customers. I play with Android, but unless Apple really screws up, I have no reason to get my music and apps from anywhere else. Any Apple device I buy automatically becomes part of a larger whole, and they all synchronize with each other seamlessly.
So why did Apple's stock price plunge? Frankly, because it couldn't go any higher or be more popular. When 90 percent of your shares are owned by institutional investors, there's no one left to sell them to. It's the Law of Big Numbers. Since the introduction of the iPod until last October, shares of Apple have increased by about 9,300 percent. That kind of growth is simply unsustainable.
But that does not imply that Apple can or should come out with brand-new products every six months. If past history is any indication, there will be new laptops in the summer, and new phones and iPads in the fall. And there may be something else. but Apple isn't saying. Tim Cook isn't Steve Jobs because even Steve Jobs wasn't Steve Jobs. It's easy to deify the dead, because they make so few mistakes, but Jobs made plenty. Costly ones, too. Tim Cook is a supply-chain genius and a gifted manager.
So what is Apple doing with all that money they're making? They think their best investment is to buy back Apple stock.